The Internet has been a magnet for all kinds of crazies. One kind who can attract the crazies is the doomsayer.

While some doomsayers advocate prepping for the zombie apocalypse others preach fire and brimstone over peak oil and it's cousin, climate change.Of late, I discovered Our Finite World by Gail Tverberg. Her blog first came to my attention through an article published at Zero Hedge written by her Russia and the Ukraine – The Worrisome Connection to World Oil and Gas Problems.Ms. Tverberg pitches herself as "actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change." Ms. Tverberg believes that "[o]il limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply."Ms. Tverberg has gathered what seems to be a cult into her Chicken Little church of doom over oil.After addressing the doom and gloom of her article in PUTIN'S RUSSIANS AREN'T MEDDLING IN UKRAINE BECAUSE OF OIL and mentioning such in a comment on her blog, Ms. Tverberg directed a few comments to me among which are:

“The taxes depend on the selling price of oil and gas, as well as the cost of extraction."

and

"Russia has different tax laws that we do. It changes the taxes monthly, to get as much as the market will bear. The taxes depend both on extraction costs and price available in the market place. I am not sure how different it would be from calculating pretax profits, and taking, say, 90% of it.”

ME: Taxes have nothing to do with costs. Taxes do not depend on costs at all. Taxes are an unearned share of profits. Without profit, there cannot be taxes.All prices get governed by the one, true, infrangible law of trade — the Law of Prices. The Law of Prices holds the winning bids of purchase and sale in the face of what is on offer sets the price. All firms get governed by the Axiom of Profit — the sum of sales on prices set by winning bidders must at least equal the cost of production otherwise a producer goes to ruin.If the price of something is $10 and cost to produce is $10, there is no profit. Politicians can't levy taxes on $0. If the cost to produce is $11, there is a -$1 loss. Politicians can't levy taxes on -$1 loss.The ability of politicians to collect taxes works the same the earth over and through all of history. Jurisdictional tax laws can't overcome reality of the constraints to trade — the Law of Prices and the Axiom of Profit. Only through subsidy, can politicians steal from some and either give buying power to bidders, forcing up prices to at least break even or pay for costs of producers to give the appearance of profit.Elsewhere on her blog, she made rather outlandish claims in what seems to be attempts to support her gloom and doom preaching. "Since 2005, (1) world oil supply has not increased." ~ Gail TverbergME: The EIA shows that world oil output has grown 6.7% since 2005.Gail Tverberg: "Oil limits seem to be pushing us toward a permanent downturn, including a crash in credit availability, loss of jobs, and even possible government collapse."ME: From the start of 2005 to peak credit in April 2008, loans and leases in bank credit grew 40.6%! Oil production barely grew at 1.3%. Clearly, oil is not causal for credit. Gail Tverberg: "Oil supply limits appear to be a primary cause of the 2008–09 recession."ME: An immense credit expansion arose and when expected forthcoming profit failed to materialize, collapse quickly followed. This is the same story of every undue credit expansions. From an interim low of $1,286.14 trillion (inflation-adjusted) in January 1994 to a peak of $3,354.06 trillion (inflation-adjusted) in April 2008, credit grew 160.8%. During the same period, world oil output grew a whopping 23.3%! So where is the supposed oil supply limit?In contrast, between January 1, 1980 and January 1, 1990, credit grew 19.9% (inflation-adjusted). Yet,world oil output only grew 3.8% during the same period. However, GDP grew a whopping 111%! [See: THE BUBBLE ALAN GREENSPAN COULDN'T SEE WITH ROUTINE DATA COLLECTED BY HIS ONE-TIME EMPLOYER, THE FEDERAL RESERVE and INFLATION REVEALED! "REAL GDP" AND FEDERAL RESERVE BANK UNITS ]If oil were the driver of credit and economies, then doomsayers need to explain how banking and credit expansions arose before the advent of petroleum as a source of energy.Gail Tverberg: "I have made the point several times that the price of oil is now too low for many exporters to make the money they need to and too low for energy companies to continue their exploration and drilling without borrowing huge amounts. This is a huge problem."ME: Ms. Tverberg fails to list any exporters. Never does Ms. Tverberg mention what are the exact production costs for any of the firms much less an industry average.If her assertion were true, there would be mass exodus of these purported many from the field of production. Supply would rapidly fall. Winning bidders would need to bid more to gain property in the smaller output of what would be on offer. Price would rise as a consequence. Excess profits would follow, which would induce new entrants.Yet, why doesn't anyone see her false scenario happening. Instead, the EIA reports ever growing world output. Gail Tverberg: "Prices are either (1) too high for consumers, or (2) too low for producers, or (3) both."ME: Exactly for which consumers and exactly for which producers? It's odd how Ms. Tverberg never identifies all whom she claims suffers.If prices are too low for producers, then Ms. Tverberg could explain how the top revenue producers on earth with profits in the tens of billion are oil producers. The list of the world's biggest revenue producers, all highly profitable is a who's who of oil producers — Royal Dutch Shell, Exxon Mobil, Sinopec, China National Petroleum, BP, Total, Chevron, Gazprom, Petrobras, Valero.Gail Tverberg: "You are not reading what I have written."ME: I have read what Ms. Tverberg has written. What she writes is fiction. Instead, here are the facts:In 9 of the 22 years between 1983 and 2005, as reported by the EIA, year-over-year U.S. total gasoline retail sales by refiners in thousand gallons per day fell. Yet, as reported by the Office of Highway Policy Information, Federal Highway Administration of the US DOT, in every one of those years highway vehicle miles traveled grew a whopping 80.9% from 1.6528 trillion miles to 2.9894 trillion miles!Clearly, technological advance in automobiles has led to more miles being driven per gallon. Doomsayers never account for technological advance.Economies grow because of efficiency in the production of property, which means the right of ownership and never the thing owned. Efficiency of production arises from technological advance.Economies exist because those of mankind need to produce property they don’t want to trade away in purchases and sales for property they do want.No one can enjoy something owned by someone else. They must trade for it first.Men produce things for the purpose of trading those things through purchase and sale in effort to secure profit expressed in buying power, which today gets embodied in cash or credit. Men do so because they believe their gained buying power sooner or later will let them buy something else wanted, which better suits their living, than what it is they sell.Credit is expected profits of the future embodied in property. Thus, credit is a kind of conditional property. Through borrowing and lending, a credit deal transforms hard to market property as wealth into property as capital. Credit coins less merchantable property into more merchantable property. Credit coins property to capital to merchantable property. In so doing, credit represents the long sought for alchemy as credit transmutes differentiated property into metaphorical gold.Credit truly is the philosopher's stone.The entirety of trade, or commerce, or real economics ties up with two words — property and profit. Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade. Trading property for profit is what commercial life is all about. Stay tuned. On, February 6, 2014, Ms. Tverberg predicted "collapse is practically right around the corner, beginning in the next year or two"because she believes there is a limit to growth-driven worldwide trade.Yet, the room for growth in trade is enormous almost unfathomably so. The 3.523 billion who live on less than US$2.50 a day would argue there is plenty of room for growth. The 5.637 billion who live on less than US$10 a day would argue there is plenty of room for growth. That's 80% of worldwide population!